HomeMy Public PortalAbout2010-02-01 Lease Agreementt for Management & Operation of the Airport Restaurant - Awh, Steven
r
CITY OF FULLERTON
LEASE AGREEMENT
FOR
MANAGEMENT AND OPERATION OF
THE RESTAURANT AT THE
FULLERTON MUNICIPAL AIRPORT
FEBRUARY 2010
TABLE OF CONTENTS
SECTION
TITLE PAGE NO.
1.
Leased Premises.................................................... 1
2.
Term ..................................................................... 1
3.
Option to Extend .................................................... 2
4.
Required and Optional Services and Uses ............ 2
5.
Initial Construction ................................................. 3
6.
Rent ..................................................................... 3
7.
Rent Payment Procedure and Accounting ............ 5
8.
Charge for Late Payment ..........:............................ 6
9.
Security Deposit ..................................................... 6
10.
Airport Promotional Activities ................................. 7
11.
Terminal Expansion ............................................... 7
12.
Notices................................................................... 8
13.
Utilities ................................................................... 8
14.
Construction of Improvements by Lessee ............. 8
15.
Signs ..................................................................... 9
16.
Damage to or Destruction of Improvement............. 10
17.
Lessee's Assurance of Construction Completion .. 10
18.
Maintenance .......................................................... 10
19.
Rent for Non-Permitted Services and Uses ........... 11
20.
Employee and Agents ........................................... 11
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II
21.
Record and Accounts ............................................
22.
Hours, Procedures, and Prices...............................
23.
Insurance............................................................... .
24.
Indemnification ......................................................
25.
Taxes and Assessments .......................................
26.
Unlawful Use .........................................................
27.
Disposition of Abandoned Personal Property........
28.
Holding Over..........................................................
29.
Assigning and Subletting .......................................
30.
Successors in Interest ...........................................
31.
Default in Terms of the Lease by Lessee ...............
32.
City's Right to Re-Enter .........................................
33.
Quitclaim of Lessee's Interest Upon Termination ..
34.
Warranties .............................................................
35.
Attorney's Fees and Costs .....................................
36.
Amendments .........................................................
37.
Lease Organization ...............................................
38.
Force Majeure .................................... ...... .............
39.
Partial Invalidity ......................................................
40.
Waiver of Rights ....................................................
41.
Nondiscrimination.................................................. .
42.
Agreements with United States .............................
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of Restaurant At Fullerton Airport
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13
13
15
15
15
16
16
16
16
16
20
20
21
21
21
21
21
21
21
22
22
Page
III
43.
Right of Flight ...... ... ... ... ... ......... ...... ... ...... ... ...
44.
Hazardous Materials..............................................
45.
Public Records ......................................................
46.
Relationship of Parties ...........................................
47.
Attachments to Lease ............................................
1. ATTACHMENT "A" - RFP
2. ATTACHMENT "8" - PROPOSAL
3. ATTACHMENT "C" - LOCATION PLAN
4. ATTACHMENT "D" - REQUIRED IMPROVEMENTS
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24
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Page
IV
FULLERTON MUNICIPAL AIRPORT
LEASE AGREEMENT
for
MANAGEMENT AND OPERATION OF THE
AIRPORT RESTAURANT
This lease agreement ("Lease") between the City of Fullerton (the "CITY"), a
municipal corporation, and Steven Awh ("LESSEE") takes effect this 1 day of
February , 2010 (the "Effective Date").
BACKGROUND
The CITY needs and requires the services of a qualified restaurant operator to
manage and operate the Fullerton Municipal Airport Restaurant (the "Restaurant"),
located at 4011 West Commonwealth Avenue, Fullerton, CA, as described in the
Request for Proposal ("RFP"). The RFP is attached to this Lease as Attachment "A"
and is incorporated by this reference.
LESSEE is qualified and has submitted a proposal ("Proposal") in response to
the CITY's RFP. A copy of the Proposal is attached to this Lease as Attachment "B" and
is incorporated by this reference.
The CITY has reviewed LESSEE's Proposal and finds it compatible with the
CITY's intent, and the CITY Council has authorized entering into this Lease allowing
LESSEE to operate the Restaurant on the following terms and conditions.
Therefore, the CITY and LESSEE agree as follows:
1. LEASED PREMISES
CITY leases to LESSEE the Restaurant area, approximately 2,419 sq. ft. in
size, and located at the Fullerton Municipal Airport Terminal Building as
shown on Attachment "C," incorporated by this reference (the "Leased
Premises").
2. TERM
The term of this Lease will be for a period of five (5) years, commencing at
9:00 a.m. on February ~, 2010 and terminating at 9:00 a.m. on February
~, 2015.
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3. OPTION TO EXTEND
A. LESSEE is hereby granted and shall, if not then in default under this
lease, have two (2) separate options to extend the term of this Lease for two
(2) successive periods of five (5) years each beyond the original expiration
date of this lease (for a total maximum extension of ten (10) additional years),
but otherwise on the same terms, covenants, and conditions and subject to
the same exceptions and reservations contained in this lease.
B. Each of these five (5) year options will be exercised only if LESSEE
delivers to Landlord, at least six (6) months prior to the termination of the then
current term, written notice of LESSEE's election to exercise the option as
provided in this section. The written notice shall be deemed effective on
personal delivery to CITY or on the date it is deposited in the United States
mail in accordance with the provisions of Section 12.
C. If LESSEE is in default of its obligations under the Lease on the date the
notice to extend is given or on the date the next option is to commence, this
Lease will expire at the end of the initial term, or the then existing option
period as applicable.
D. In the event that LESSEE does not extend the term of this lease as herein
provided, and holds over beyond the expiration of the term of this lease, that
holding over shall be deemed a month-to-month tenancy only at the rental of
the current rental rate as stipulated by this lease to include any increase per
paragraph 6D. Rent will be payable on the first day of each and every month
thereafter until the tenancy is terminated in a manner provided by law.
E. Rental during the option periods will be determined in accordance with
Section 6 (RENT).
F. For purposes of this Agreement the initial term together with any
authorized or agreed upon extensions will be collectively referred to as the
"Term."
4. REQUIRED AND OPTIONAL SERVICES AND USES
A. Required Services and Uses. CITY's primary purpose for entering into
this Lease is to promote the development of services needed by the public.
In furtherance of that purpose, LESSEE must, during the Lease Term,
maintain and operate the Restaurant to be open seven days a week. The
Restaurant must be open and serve food, at minimum, during standard
breakfast and lunch hours, and may serve dinner, if economically feasible.
B. Optional Services and Uses. Subject to the prior written approval of CITY,
LESSEE may provide those additional services and uses which are directly
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compatible with the provision of restaurant services, which are permissible
under California law and the Fullerton Municipal Code, and which are not in
conflict with other services and uses established at the Airport. These
services and uses may include applying for a permit to service beer and wine,
but no other alcoholic beverages. City retains absolute discretion to approve
or disapprove any additional services which go beyond the service of food.
C. Restricted Use. The above listed services and uses, both required and
optional, will be the only services and uses permitted. LESSEE agrees not to
use the Leased Premises for any other purpose or to engage in any other
business activity within or from the Leased Premises.
5. INITIAL CONSTRUCTION
A. LESSEE will cause to be designed, constructed, and installed within the
Leased Premises, at no cost to CITY, appropriate improvements so as to
adequately accommodate those services and uses permitted under Section 4
of this Lease (REQUIRED AND OPTIONAL SERVICES AND USES). All
improvements must be reviewed and approved by City prior to installation.
B. At minimum, LESSEE must make those improvements which are
described in the document attached as Attachment "0," incorporated by this
reference. The schematic plans prepared by LESSEE and approved by CITY
will be a master plan for development of the Leased Premises, and the
working drawings prepared by LESSEE and approved by CITY will be the
plans, specifications, and time schedule for constructing improvements.
6. RENT
A. Base Rent. Beginning upon the Rent Commencement Date as defined
below, LESSEE will pay as base rent for the Leased Premises the sum of
$1.085 Dollars per month (the "Base Rent"), together with a late fee in
accordance with Section 8 of this Agreement, if the full amount of the Base
Rent, together with and any other sums owed by LESEE under this Lease, is
not paid to CITY by the tenth (10th) of each month (the "Delinquent Date"). In
the event an obligation to pay rent or fees terminates on some date other
than the last day of the month, the last month's rent or fees will be prorated
based on a thirty (30) day month to reflect the actual period of tenancy.
B. Gross Receipts Payment.
1. Gross Receipts Payment Required.
Each calendar month, in addition to the Base Rent, LESSEE must pay
to CITY a Gross Receipts Payment. The Gross Receipts Payment
shall be equal to three percent (3%) of the Gross Sales generated
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from the Leased Premises over $30,000 during the calendar month in
question. For example, if Gross Sales during a month is $40,000, the
Gross Receipts Payment due to the City for that month would be $300
(calculated as follows: $40,000 - $30,000 = $10,000 x .03 = $300). A
Gross Receipts Payment shall not be required to be paid by LESSEE
during any month in which the Gross Sales generated from the Leased
Premises are $30,000 or less. The Gross Receipts Payment must be
paid by LESSEE to CITY within forty days from the end of the calendar
month in which the Gross Sales were generated. LESSEE is
encouraged to make the Gross Receipts Payment in conjunction with
the regular monthly Base Rent payment.
2. Definition of Gross Sales. For purposes of this Lease, the term
"Gross Sales" shall be defined to include all of the following:
a) The sale price of all goods, wares, merchandise, and
products sold on or from the Leased Premises by LESSEE,
whether for cash or credit and whether payment is actually
made or not;
b) The charges made by LESSEE for the sale or rendition on
or from the Leased Premises of services of any nature or kind
whatsoever, whether for cash or credit and whether payment is
actually made or not;
c) All sums deposited in any coin-operated vending machine or
other device maintained on the Leased Premises, regardless
of the ownership of the machine or device, or whether the
sums are removed and counted by LESSEE or others, and
regardless of what percentage of sums the LESSEE is entitled
to receive.
d) Gross Sales excludes all sales and excise taxes payable by
LESSEE to Federal, State, County, or Municipal governments
as a direct result of operations under this Lease. Refunds for
goods returned and deposits will be deducted from current
Gross Sales upon return.
e) Bad debt losses will not be deducted from Gross Sales.
C. Rent Commencement Date. LESSEE's obligation to pay the Base Rent
payments, the Gross Receipts Payments, and any other payment required by
this Lease, will begin immediately upon the Effective Date of this Lease;
provided, however, if at the inception of this Lease LESSEE opts to close the
Restaurant for a period not to exceed 90 days for refurbishment, the
obligation to pay rent will begin upon the issuance of a Certificate of
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Occupancy from the Building Division of the Development Services
Department or at the end of the 90 days, whichever occurs earlier ("Rent
Commencement Date").
D. Annual CPI Adiustment of Base Rent. Each July 1S\ commencing in
2011, and each year thereafter on the same date for the duration of the
Term, the monthly Base Rent shall be subject to an automatic increase equal
to one-twelfth of the annual percentage change in the Consumer Price Index
("CPI"), All Items, for All Urban Consumers in the Los Angeles-Anaheim-
Riverside Area for the preceding year, promulgated by the Bureau of Labor
Statistics of the U.S. Department of Labor. The increased amount after the
adjustment shall become the new Base Rent for all purposes under this
Lease, including the calculation of future Base Rent increases.
Notwithstanding anything stated herein to the contrary, in no event shall the
increase in the Base Rent due each year under this section be less than a
three percent (3%) annual increase, or exceed a five percent (5%) annual
increase, in any adjustment period.
In the event that the CPI is not issued or published for the period for which
such Base Rent is to be adjusted and computed hereunder, or in the event
that the Bureau of Labor Statistics of the United States Department of Labor
should cease to publish said index figures, then any similar index published
by any other branch or department of the United States Government shall be
used and if none is so published, then another index generally recognized
and authoritative shall be agreed upon by CITY and LESSEE.
7. RENT PAYMENT PROCEDURE AND ACCOUNTING
A. Payment of Rent. On or before the 10th of each month, the LESSEE must
pay the monthly Base Rent payment, together with the Gross Receipts
Payment for the immediately preceding month, and any late fees or other
amounts owing under the Lease.
Each month, in conjunction with LESSEE's monthly Base Rent payment,
LESSEE will deliver to CITY a correct statement of all Gross Receipts
generated during the immediately preceding calendar month, and the
corresponding Gross Receipts Payment that is due for that period. The
statement must be signed by the LESSEE or its responsible agent under
penalty of perjury, and must be in the form prescribed by the CITY's
Administrative Services Department. If the total Gross Receipts for the
preceding month are more than $30,000, the LESSEE must pay CITY a
Gross Receipts Payment as provided in Section 6B, in addition to its monthly
Base Rent payment.
B. Place of Payment and Filing. All payments, whether for Base Rent, Gross
Receipts Payments, or otherwise, must be delivered to and statements must
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be filed with the City Treasurer/Revenue & Utility Services Manager at City
Hall, 303 West Commonwealth Avenue, Fullerton, CA 92832. The
designated place of payment and filing may be changed at any time by CITY
upon ten days written notice to LESSEE. Rentals may be paid by check
made payable to the City of Fullerton.
C. The Accounting Year. The accounting year will be 12 full calendar months.
The accounting year may be established by LESSEE, provided LESSEE
notifies the CITY's Administrative Services in writing of the accounting year to
be used. The accounting year will be deemed to be approved by CITY,
provided CITY's Administrative Services has not objected to LESSEE's
selection within 60 days of LESSEE's notification.
In the event LESSEE fails to establish an accounting year of its choice,
regardless of the cause, the accounting year will be synonymous with the 12
month period contained in the first one-year term of the Lease. Any portion of
a year that is not reconciled, should the accounting year and the anniversary
year of the Lease commencement not be the same, will be accounted for as
if it were a complete accounting year.
Once an accounting year is established, it will continue through the term of
the Lease unless CITY's Administrative Services specifically approves in
writing a different accounting year. CITY's Administrative Services will only
approve a change in accounting years in the event of undue hardship being
placed on either the LESSEE or CITY, and not because of mere convenience
or inconvenience.
8. CHARGE FOR LATE PAYMENT
If any payment described in Section 6 is not paid to CITY within ten days after
the due date, a late charge of 7% of the payment due and unpaid will be added
to the payment and the total sum will become immediately due and payable to
the CITY. An additional charge of 7% of the outstanding amount will be added
each month thereafter for each additional month that the payment remains
unpaid.
9. SECURITY DEPOSIT
A security deposit of $2,170 must be provided to the CITY by the LESSEE, prior
to the Effective Date, in any of the following forms:
A. Cash
B. The assignment to CITY of a savings deposit held in a financial institution in
Orange County acceptable to CITY. At the minimum, such assignment must
be evidenced by the delivery to CITY of the original passbook reflecting the
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savings deposit and a written assignment of the deposit to CITY in a form
approved by CITY.
C. A Time Certificate of Deposit from a financial institution in Orange County
where the principal sum is made payable to CITY. Both the financial
institution and the form of the certificate must be approved by CITY.
Regardless of the form in which LESSEE elects to make said security
deposit, all or any portion of the principal sum must be available
unconditionally to CITY for correcting any default or breach of this Lease by
LESSEE, its successors or assigns, or for payment of expenses incurred by
CITY as a result of the failure of LESSEE, its successors or assigns, to
faithfully perform all terms, covenants, and conditions of this Lease.
Should LESSEE elect to assign a savings deposit to CITY or provide a Time
Certificate of Deposit to fulfill the security deposit requirements of this Lease,
the assignment, certificate, or instrument must have the effect of releasing
the depository or creditor from liability on account of the payment of any or all
of the principal sum to CITY or order upon demand by CITY. The agreement
entered into by LESSEE with a financial institution to establish the deposit
necessary to permit assignment or issuance of a certificate as provided
above may allow the payment to LESSEE or order of interest accruing an
account of the deposit.
LESSEE must maintain the required security deposit throughout the Lease
term. Failure to do so will be deemed a default and will be grounds for
immediate termination of this Lease. The security deposit will be rebated,
reassigned, released, or endorsed to LESSEE or order as applicable at the
end of the Lease term provided LESSEE has fully and faithfully performed
each and every covenant and condition of this Lease.
10. AIRPORT PROMOTIONAL ACTIVITIES
The LESSEE agrees to participate in Airport-sponsored events such as "Airport
Day," fly-ins, and tours, and to cooperate with CITY in promoting these events.
11. TERMINAL EXPANSION
CITY reserves the right to develop, expand, or improve the Airport terminal
building, including the right to negotiate or award by public bid, an agreement
for the construction of a separate restaurant or dinner house. LESSEE will have
the non-exclusive right to participate in any negotiations or bid process for the
right to operate the restaurant or dinner house.
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12. NOTICES
All notices and written communications sent by one party to the other will be
personally delivered or sent by registered or certified U.S. Mail, postage prepaid,
return receipt requested to the following addresses indicated below:
If to City:
Fullerton Municipal Airport
Attn: Airport Manager
4011 West Commonwealth Avenue
Fullerton, CA 92833
With a copy to:
City of Fullerton
Attn: City Clerk
303 W. Commonwealth Avenue
Fullerton, CA 92832
,#ZO!,
'\2.tol
If to Lessee:
790 N. Euclid St. #203
Anaheim, CA 92801
Steve Awh
The effective date of any notice or written communications sent by one party to
the other will be the date received if by personal service, or forty-eight (48) hours
after deposit in the U.S. Mail as reflected by the official U.S. postmark.
Either party may change its address by giving notice in writing to the other party.
13. UTILITIES
LESSEE must pay for all water, gas, electric, telephone, trash collection, and all
other services supplied to the Leased Premises.
14.CONSTRUCTION OF IMPROVEMENTS BY LESSEE
A. CITY's Consent. No improvements can be made within the Leased Premises
without prior written consent of CITY. Any conditions relating to the manner,
method, design, and construction of any improvements, fixed by CITY, will be
deemed conditions of this Lease as though they were originally stated in this
Lease. LESSEE may, at any time and at its sole expense, install and place
business fixtures and equipment within the Leased Premises.
B. Strict Compliance with Plans and Specifications. All improvements
constructed by LESSEE within the Leased Premises must be constructed in
strict compliance with detailed plans and specifications approved by CITY,
and in accordance with all applicable laws.
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C. Statement of Construction Costs and "As-Build" Plans. Within 60 days
following completion of any substantial improvements within the Leased
Premises, LESSEE must furnish CITY a complete set of "As-Built" plans and
an itemized statement of the actual construction costs of such improvements.
The statement of costs must be sworn to by LESSEE or its responsible agent
under penalty of perjury.
D. Improvements to Become Property of CITY. All improvements and facilities,
exclusive of trade fixtures constructed or placed within the Leased Premises
by LESSEE, must, upon completion, be free and clear of all liens, claims, or
liability for labor or material, and will become the property of CITY at the
expiration of this Lease or upon earlier termination as provided for in this
Lease.
E. Mechanics Liens.
LESSEE shall at all times indemnify, defend, and save CITY harmless from
all claims, losses, demands, damages, cost, expenses or liability costs for
labor or materials in connection with construction, repair, alteration, or
installation of structures, improvements, equipment, or facilities, within the
Leased Premises, and from the cost of defending against any such claims,
including attorneys' fees and costs.
In the event a lien or stop-notice is imposed upon the Leased Premises or the
LESSEE's leasehold estate as a result of such construction, repair, alteration,
or installation, LESSEE shall either:
i. Record a valid Release of Lien, or
ii. Procure and record a bond in accordance with Section 3143 of the
Civil Code, which frees the Leased Premises from the claim of the
lien or stop-notice and from any action brought to foreclose the lien.
Should LESSEE fail to accomplish either of the two optional actions above
within forty-five (45) days after delivery to LESSEE of written notice of the
filing of such a lien or stop-notice, the Lease shall be in default and shall be
subject to immediate termination.
15. SIGNS
LESSEE agrees not to construct, maintain, or allow any sign upon the Leased
Premises except as authorized and approved by CITY. Unapproved signs,
banners, flags, etc., may be removed by the Airport Manager.
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16. DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS
In the event of damage to or destruction of the Leased Premises, or of any
improvements constructed by LESSEE on the Leased Premises, or in the event
the Leased Premises or any LESSEE constructed improvements are declared by
a public entity with the authority to make and enforce such declaration to be
unsafe or unfit for use or occupancy, LESSEE must within 60 days commence
and diligently pursue to completion the repair, replacement, or reconstruction of
all improvements located on the Leased Premises necessary to permit full use
and occupancy of the Leased Premises for the Restaurant purposes required by
this Lease. Repair, replacement, or reconstruction of improvements within the
Leased Premises must be accomplished in a manner and according to plans
approved by CITY.
17. LESSEE'S ASSURANCE OF CONSTRUCTION COMPLETION
Prior to commencement of LESSEE's construction of approved facilities or any
construction phase within the Leased Premises, LESSEE must furnish to the
CITY evidence of coverage that assures the CITY that sufficient monies will be
available to complete the proposed construction. The amount of coverage must
be at least the total estimated construction cost. Such coverage may take one of
the following forms:
A. Completion Bond
B. Performance, Labor and Materials Bonds supplied by LESSEE's contractor or
contractors, provided said bonds are issued jointly to LESSEE and CITY.
C. Irrevocable letter of credit from a financial institution.
D. Any combination of the above.
All bonds and letters of credit must be issued by a company qualified to do
business in the State of California and acceptable to the CITY's Airport Manager.
All bonds and letters of credit must be in a form acceptable to CITY's Airport
Manager and must insure faithful and full observance and performance by
LESSEE of all the terms, conditions, covenants, and agreements relating to the
construction of improvements within the Leased Premises.
18. MAl NTENANCE
A. CITY's Obligation. CITY will maintain or cause to be maintained, including
repair and replacement as necessary, the public parking lots, roadways, other
public facilities within the Airport, and the roof and exterior walls of Leased
Premises. Except as specified above, CITY is not required to repair or
maintain any part of the Leased Premises, specifically including but not
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limited to the interior of the Restaurant or any equipment or improvements
located within the Leased Premises.
B. LESSEE's Obligation. LESSEE, at its expense, must keep and maintain the
Leased Premises, including but not limited to interior surfaces, heating and
air conditioning systems, water, gas, electric and other utility lines, grease-
traps, air filters, and all improvements of any kind which may be erected,
constructed or installed on the Leased Premises, in good condition and in
substantial repair. It is LESSEE's sole responsibility to take all steps
necessary or appropriate to maintain this standard of condition and repair.
LESSEE expressly agrees to maintain the Leased Premises in a safe, clean,
and sanitary condition to the satisfaction of CITY, and in compliance with all
applicable laws. LESSEE further agrees to provide, at its expense,
containers for trash and garbage and to keep the Leased Premises (including
exterior areas included within the Leased Premises) free and clear of rubbish
and litter. CITY has the right to enter upon and inspect the Leased Premises
at any time for cleanliness and safety.
C. CITY's Right to Repair. If LESSEE fails to maintain or make repairs of
replacements as required in this Lease, CITY may notify LESSEE in writing of
its failure. Should LESSEE fail to correct the situation within a reasonable
time, CITY may make the necessary correction and the cost, including but not
limited to the cost of labor, materials, equipment, and administration, must be
paid by LESSEE within ten days of receipt of a statement of the cost from
CITY. CITY may, at its option, choose other remedies available in this Lease
or under the law.
19. RENT FOR NON-PERMITTED SERVICES AND USES
In addition to the payment of Base Rent and Gross Receipts Payments under
section 6 of this Lease, LESSEE must pay CITY for any service or use that is not
specifically authorized by the Airport Manager under this Lease, a sum equal to
30% of gross receipts for that service or use. Payments under this paragraph
shall be due within 40 days after the month in which payment for the service or
use is received by LESSEE, together with the regular monthly Base Rent.
Nothing in this section is intended to authorize a particular service or use beyond
what is permitted in Section 4, and nothing herein will prevent CITY from being
able to exercising any of its rights, whether to terminate the Lease or to require
termination of such service or use.
20. EMPLOYEES AND AGENTS
As used in this Section, the term "LESSEE" includes LESSEE, its officers,
employees, agents, sub lessees, concessionaires, or licensees, or any person
acting under contract with LESSEE.
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21. RECORD AND ACCOUNTS
LESSEE must at all times during the term of this Lease keep or cause to be kept
true and complete books, records, and accounts of all financial transactions in
the operation of all business activities, or whatever nature, conducted in
pursuance of the rights granted under this Lease. The records must be
supported by source documents such as sales slips, cash register tapes,
purchase invoices, or other pertinent documents.
All retail sales and charges must be recorded by means of cash registers or
other comparable devices which display to the customer the amount of the
transaction and automatically issues a receipt. The registers must be equipped
with devices which lock in sales totals and other transaction records, or with
counters which are not resettable and which record transaction numbers and
sales details. Totals registered must be read and recorded at the beginning and
end of each day.
Within 90 days after the end of each accounting year, LESSEE must, at its own
expense, submit to CITY a statement certified as to accuracy by a Certified
Public Accountant detailing the total Gross Sales generated from the Leased
Premises during the accounting year. The statement shall classify sales
according to whatever categories of business may be required from time to time
by CITY for business conducted on or from the Leased Premises.
All LESSEE's books of account and records related to this Lease or to business
operations conducted within or from the Leased Premises must be kept and
made available at one location within the limits of the County of Orange. CITY
will, through its duly authorized agents or representatives, have the right to
examine and audit said books of account and records at any and all reasonable
times for the purpose of determining there accuracy, and of the monthly
statements of sales made and monies received. If following the audit it is
determined that the amount of Gross Sales reported by LESSEE was
understated, LESSEE shall immediately pay to CITY the amount determined to
be owed. If it is determined LESSEE overstated its Gross Revenues, City shall
immediately pay to LESSEE the amount determined to be owed to LESSEE.
The cost of the audit will be borne by CITY, unless the audit reveals a
discrepancy of more than 5% between the Gross Receipts Payments due to
CITY as reported by LESSEE in accordance with this Lease and the Gross
Receipts that were due as determined by the audit. In the event of a
discrepancy of more than 5% in favor of the CITY, the full cost of the audit must
be paid by LESSEE to CITY.
Upon the request of CITY, LESSEE must promptly provide, at LESSEE's
expense, any necessary data to enable CITY to fully comply with any and every
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12
requirement of the State of California or the United States of America for
information or reports relating to this Lease and LESSEE's use of the Leased
Premises.
22. HOURS. PROCEDURES, AND PRICES
LESSEE must maintain a written schedule stating the operating hours and
business procedures for the business on the Leased Premises. LESSEE must
furnish the Airport Manager a copy of the schedules. Should the Airport
Manager, upon review and conference with LESSEE, decide any part of the
schedules do not satisfy the needs of the public, LESSEE, upon written notice
from Airport Manager, must modify the schedules.
LESSEE agrees that it will operate and manage the services and facilities
offered in accordance with the schedule and procedures in a competent and
efficient manner. LESSEE must retain qualified, competent, and experienced
personnel to supervise LESSEE's operation and to represent and act for
LESSEE.
23. INSURANCE
LESSEE must procure and maintain for the duration of the Lease Term
insurance against claims for injuries to persons or damages to property which
may arise from or in connection with the LESSEE's operation and use of the
leased premises. The cost of the insurance must be borne by the LESSEE.
Minimum Scope of Insurance
Coverage must be at least as broad as:
1. Insurance Services Office (ISO) Commercial General Liability coverage
(occurrence form CG 00 01).
2. Workers' compensation insurance as required by the State of California
and Employer's Liability insurance.
3. Property insurance against all risks of loss to include tenant improvements
or betterments.
Minimum Limits of Insurance
Lessee must maintain limits no less than:
1. General Liability:
$1,000,000 per occurrence for bodily injury,
(Including operations, products, personal injury
and property damage, and completed
operations.) If Commercial General Liability
insurance or other form with a general
Page 13
Lease for Operation
of Restaurant At Fullerton Airport
aggregate limit is used, either the general
aggregate limit must apply separately to this
projecUlocation or the general aggregate limit
shall be twice the required occurrence limit.
2. Employer's Liability:
$1,000,000 per accident for bodily injury or
disease.
3. Workers Compensation:
In accordance with the requirements of the
State of California.
3. Property Insurance:
Full replacement cost with no coinsurance
penalty provision.
Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by
the City. At the option of the City, either (a) the insurer must reduce or eliminate
such deductibles or self-insured retentions as respects the City, its officers,
officials, employees and volunteers or (b) LESSEE must provide a financial
guarantee satisfactory to the City guaranteeing payment of losses and related
investigations, claim administration and defense expenses.
Other Insurance Provisions
The general liability policy is to contain, or be endorsed to contain, the following
provisions:
1. The City, its officers, officials, employees and volunteers are to be covered as
insureds with respect to liability arising out of ownership, maintenance or use
of the Leased Premises.
2. The LESSEE's insurance coverage shall be primary insurance as respects
the City, its officers, officials, employees and volunteers. Any insurance or
self-insurance maintained by the City, its officers, officials, employees or
volunteers shall be excess of the lessee's insurance and shall not contribute
with it.
The City must be named as a loss payee on the property coverage and the
insurer shall agree to waive all rights of subrogation against the City.
The insurer must waive all rights of subrogation against the City, it officials,
employees and volunteers under the Workers' Compensation and Employer's
Liability coverage.
Each insurance policy required by this clause must be endorsed to state that
coverage will not be canceled, except after 30 days' prior written notice by
Lease for Operation Page 14
of Restaurant At Fullerton Airport
certified mail, return receipt requested, has been given to the City.
Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best's rating of no
less than A:VII, unless otherwise accepted by City.
Verification of Coverage
Lessee must furnish the City with copies of the original certificates and
endorsements, including amendatory endorsements effecting coverage required
by this clause. The endorsements should be on forms provided by the City or on
other than the City's forms, provided those endorsements or policies conform to
the requirements. All certificates and endorsements are to be received and
approved by the City before work commences; however, failure to do so will not
operate as a waiver of these insurance requirements. The City reserves the right
to require complete, certified copies of all required insurance policies, including
endorsements affecting the coverage required by these specifications at any
time.
24. INDEMNIFICATION
LESSEE must defend, indemnify, and hold harmless CITY, its officers, agents,
and employees, from and against any and all claims, demands, loss, liability, or
attorneys' fees and costs of any kind or nature which CITY, its officers, agents,
and employees may sustain or incure or which may be imposed upon them or
any of them for injury to or death of persons, or damage to property as a result
of, arising out of, or in any manner related with this Lease or with the occupancy
and use of the Leased Premises by LESSEE, its officers, agents, employees,
subtenants, licensees, patrons, or visitors, including the City's active or passive
negligence, except where the loss results from the sole negligence or willful
misconduct of the City.
25. TAXES AND ASSESSMENTS
Under Revenue and Taxation Code ~ 107.6, a possessory interest subject to
taxation may be created by this Lease. All taxes and assessments which may
become due and payable upon the Leased Premises, including but not limited to
taxes and assessments upon fixtures, equipment, or possessory interests, are
the responsibility of LESSEE and must be paid promptly.
26. UNLAWFUL USE
LESSEE agrees no improvements can be erected, placed upon, operated, nor
maintained within the Leased Premises, nor any business conducted or carried
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on in violation of the terms of this Lease, or of any regulation, order of law,
statute, bylaw, or ordinance of a governmental agency having jurisdiction.
27. DISPOSITION OF ABANDONED PERSONAL PROPERTY
If LESSEE abandons or is dispossessed of the Leased Premises by process of
law or otherwise, title to any personal property belonging to LESSEE and left on
the Leased Premises 15 days after such abandonment or dispossession will be
deemed to have been transferred to CITY. CITY will have the right to remove
and to dispose of such property without liability to LESSEE or to any person
claiming under LESSEE, and the CITY will have no need to account for the
property.
28. HOLDING OVER
In the event LESSEE continues in possession of the Leased Premises after the
term of this Lease, such possession will not be considered a renewal of this
Lease but a tenancy from month to month and will be governed by the conditions
and covenants contained in this Lease.
29.ASSIGNING AND SUBLETTING
LESSEE can not assign this Lease or any of its interest in it, nor sublet the
Leased Premises or any part of it, without the prior written consent of CITY.
CITY's consent to any such assignment or subletting will not be deemed to be
consent to any subsequent assignment or subletting. Any assignment or
sublease entered into by LESSEE and approved by CITY is subject to all of the
terms and conditions of this Lease, including but not limited to a requirement that
the new tenant must acknowledge in writing that it has received a copy of the
Lease and is willing to abide by all of its terms and conditions.
30.SUCCESSORS IN INTEREST
Unless otherwise provided in this Lease, the terms, covenants, and conditions
contained in this Lease apply to and bind the heirs, successors, executors,
administrators, and assigns of all the parties, all of whom are jointly and severally
liable.
31. DEFAULT IN TERMS OF LEASE BY LESSEE
A. The occurrence of anyone or more of the following events will constitute a
default by LESSEE:
1. LESSEE's abandonment or vacation of the Leased Premises.
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2. LESSEE's failure to make any payment of rent or any other payment
required by this Lease, as and when due, where the failure continues for a
period of three days after the CITY has provided LESSEE with written notice
of the failure; provided, however, that any such notice will be in lieu of and not
in addition to any notice required under the unlawful detainer statutes,
California Cost of Civil Procedure Section 1161 et seq.
3. LESSEE's failure or inability to observe or perform any provision of this
Lease, where the failure continues for a period of thirty days after the CITY
has provided LESSEE with written notice. Any such notice will be in lieu of
and not in addition to any notice required under the unlawful detainer
statutes, California Code of Civil Procedure Section 1161 et seq. If the
nature of LESSEE's failure is such that it can be cured, but that more than
thirty days are reasonably required to do so, then LESSEE will not be
deemed to be in default if LESSEE starts the cure within thirty days of
receiving notice and diligently proceeds with curing the default in a
reasonable amount of time. This right to cure is not applicable if the default
or inability to perform is financial in nature.
4. In case of or anticipation of bankruptcy, insolvency, or financial difficulties:
a) LESSEE or any guarantor of LESSEE's obligations under this Lease
will generally not pay its debts as they become due or will admit in writing
its inability to pay its debts, or will make a general assignment for the
benefit of creditors;
b) A case is commenced by or against LESSEE under Chapters 7, 11, or
13 of the Bankruptcy Code, Title 11 of the United States Code as now in
force or later amended and if so commenced against LESSEE, the same
is not dismissed within 60 days;
c) The appointment of a trustee or received to take possession of
substantially all of LESSEE's assets located at the Leased Premises or of
LESSEE's interest in this Lease, where such seizure is not discharged
within 30 days; or
d) LESSEE's convening of a meeting of its creditors or any class thereof
for the purpose of effecting a moratorium upon or compositions of its
debts.
In the event of any such default, neither this Lease nor any interest of
LESSEE in and to the Leased Premises will become an asset in any of such
proceedings and, in any such event and in addition to any and all rights or
remedies of the CITY under this Lease or by law provided it will be lawful for
the CITY to declare the term ended and to re-enter the Leased Premises
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and take possession and remove all persons, and LESSEE and its creditors
(other than CITY) will have no further claims.
B. In the event of any default by LESSEE, then in addition to any other remedies
available to CITY at law or in equity, CITY may exercise the following remedies:
1. CITY may terminate this Lease and all of LESSEE's rights under it by
giving written notice of such termination to LESSEE. In the event that CITY
elects to terminate this Lease, then CITY may recover from LESSEE:
a) The worth at the time of award of the unpaid rent and other
charges which had been earned as of the date of the termination;
b) The worth at the time of award of the amount by which the unpaid
rent and other charges which would have been earned after the date of
the termination until the time of award exceeds the amount of such rental
loss that LESSEE proves could have been reasonable avoided:
c) The worth at the time of award of the amount by which the unpaid
rent and other charges for the balance of the term after the time of award
exceeds the amount of such rental loss that LESSEE proves could be
reasonably avoided:
d) Any other amount necessary to compensate CITY for all the
detriment proximately caused by LESSEE's failure to perform its
obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom, including, but not limited to, the cost of
recovering possession of the Leased Premises, expenses, or reletting,
including necessary repair, renovation, and alteration of the Leased
Premises, reasonable attorney's fees, expert witness costs, and any other
reasonable costs; and
e) Any other amount which CITY may by law be permitted to recover
from LESSEE to compensate CITY for the detriment caused by LESSEE's
default.
The term "rent" as used in this section will be deemed to mean the annual
Base Rent, the Gross Receipts Payment, together with any other sums
required to be paid by LESSEE under the terms of this Lease. All such
sums, other than the annual Base Rent, will be computed on the basis of
the average monthly amount accruing during the 24-month period
immediately prior to default, except that if it becomes necessary to
compute such rental before such 24-month period has occurred, then on
the basis of the average monthly amount during that shorter period. The
term "worth at the time of award" will be computed by allowing interest at
the maximum rate permitted by law. As used in subparagraph c) above,
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the "worth at the time of award" will be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus 1 %, but not in excess of 10% per
annum.
2. Continue this Lease in effect without terminating LESSEE's right to
possession, even though LESSEE has breached this Lease and
abandoned the Leased Premises, and to enforce all of CITY's rights and
remedies under this Lease, at law or in equity, including the right to
recover the rent as it becomes due under this Lease. Notwithstanding the
foregoing, CITY may at any time thereafter elect to terminate this Lease
for the previous breach by notifying LESSEE in writing that LESSEE's
right to possession of the Leased Premises has been terminated.
3. Nothing in this Section will be deemed to affect LESSEE's indemnity of
CITY for liability or liabilities based upon occurrences prior to the
termination of this Lease for personal injuries or property damage under
the indemnification clause or clauses contained in this Lease.
No delay or omission of CITY to exercise any rather or remedy will be
construed as a waiver of such right or remedy of any default by LESSEE
under this Lease. The acceptance by CITY of rent or any other sums
hereunder will not be:
1. A waiver of any preceding breach or default by LESSEE of
any provision thereof, other than the failure of LESSEE to pay the
particular rent or sum accepted, regardless of CITY's knowledge of
such preceding breach or default at the time of acceptance of such
rent or sum; or
2. A waiver of CITY's right to exercise any remedy available to
CITY by virtue of such breach or default. No act or thing done by
CITY or CITY's agents during the term of this Lease will be deemed
an acceptance of a surrender of the Leased Premises, and no
agreement to accept surrender will be valid unless in writing and
signed by CITY.
C. All covenants and agreements to be performed by LESSEE under any of the
terms of this Lease must be performed by LESSEE at LESSEE's sole cost and
expense, and without any abatement of rent. If LESSEE fails to pay any sum of
money other than rent required to be paid under this Lease, or to provide any
required insurance, or to perform any other act required to be performed under
this Lease, then, in addition to any other remedies provided in this Lease or
under law, CITY may, but is not obligated to, and without waiving or releasing
LESSEE from any obligations under this Lease, make any such payment,
provide such insurance, or perform any such act, on LESSEE's part. Any
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payment of performance of any act or the provision of any such insurance on
LESSEE's behalf will not give rise to any responsibility of CITY to continue
making the same or similar payments, to continue purchasing the required
insurance, or to continue performing the same or similar acts. All costs,
expenses, and other sums incurred or paid by CITY in connection therewith,
together with interest at the maximum rate permitted by law from the date
incurred or paid by CITY, will be deemed to be additional rent under this Lease,
and must be paid by LESSEE with and at the same time as the next monthly
installment of Base Rent, and any default will constitute a breach of the
covenants and conditions of this Lease.
32. CITY'S RIGHT TO RE-ENTER
LESSEE agrees to yield and peaceably deliver possession of the Leased
Premises to CITY on the date of termination of this Lease, whatsoever the
reason for such termination.
Upon giving written notice of termination to LESSEE, CITY will have the right to
re-enter and take possession of the Leased Premises on the date such
termination becomes effective without further notice of any kind and without
institution of summary or regular legal proceedings. Termination of the Lease
and re-entry of the Leased Premises by CITY will in no way alter or diminish any
obligation of LESSEE under the Lease terms and will not constitute an
acceptance or surrender.
LESSEE waives any and all right of redemption under any existing or future law
or statute in the event of eviction from or dispossession of the Leased Premises
for any reason, or in the event CITY re-enters and takes possession of the
Leased Premises in a lawful manner.
33. QUITCLAIM OF LESSEE'S INTEREST UPON TERMINATION
Upon termination of this Lease for any reason, including but not limited to
termination because of default by LESSEE or due to expiration of the Term,
LESSEE will execute, acknowledge, and deliver to CITY, within thirty days after
receipt of written demand therefore, a good and sufficient deed whereby all right,
title and interest of LESSEE in the Leased Premises is quitclaimed to CITY.
Should LESSEE fail to refuse to deliver the required deed to CITY, CITY may
prepare and record a notice reciting the failure of LESSEE to execute,
acknowledge, and deliver the deed and the notice will be conclusive evidence of
the termination of this Lease and of all right of LESSEE or those claiming under
LESSEE in and to the Leased Premises.
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34. WARRANTIES
CITY makes no warranty, guarantee, or averment of any nature whatsoever
concerning the condition of the Leased Premises, including the physical
condition thereof, or any condition which may affect the Leased Premises, and it
is agreed that CITY will not responsible for any loss, damage, or costs which
may be incurred by LESSEE by reason of any such condition or conditions.
35.ATTORNEY'S FEES AND COSTS
Should legal action be required to enforce any of the terms and conditions of this
Lease, or for an unlawful detainer of the Leased Premises, the prevailing party
will be awarded, in addition to any other relief, reasonable attorney's fees.
36. AMENDMENTS
This Lease sets forth all of the agreements and understandings of the parties,
and any modification must be written and properly executed by both parties.
37. LEASE ORGANIZATION
The various headings and numbers in this Lease, the grouping of provisions of
this Lease into separate clauses and paragraphs, and its are for the purpose of
convenience only and will not be considered otherwise.
38. FORCE MAJEURE
If either party is delayed or prevented from the performance of any act required
by this Lease by reason of acts of God, restrictive governmental laws or
regulations, or other cause without fault and beyond the control of the party
obligated (financial inability excepted), performance of such act will be excused
for the period of the delay and the period for the performance of any such act
swill be extended for a period equivalent to the period of such delay. However,
nothing in this clause will excuse LESSEE from the prompt payment of any rental
or other charge required of LESSEE, except as may be expressly provided
elsewhere in this Lease.
39. PARTIAL INVALIDITY
If any term, covenant, condition, or provision of the Lease is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remainder of the
provisions will remain in full force and effect and will in no way be affected,
impaired, or invalidated.
40. WAIVER OF RIGHTS
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The failure of CITY or LESSEE to insist upon strict performance of any of the
terms, covenants, or conditions of this Lease will not be deemed a waiver of any
right or remedy that CITY or LESSEE may have, and will not be deemed a
waiver of the right to require strict performance of all the terms, covenants, and
conditions of the remaining Lease nor a waiver of any remedy for the subsequent
breach or default of any term, covenant, or condition of the Lease.
41. NONDISCRIMINATION
LESSEE agrees not to discriminate against any person or class of persons by
reason of sex, race, color, creed, or national origin. LESSEE will make its
accommodations and services available to the public on fair and reasonable
terms.
42.AGREEMENTS WITH UNITED STATES
This Lease is subordinate to the provisions of any existing or future agreement
between CITY and the United States of America (hereinafter "Federal
Agreement) relative to the use, operation, or maintenance of the Airport, the
execution of which Federal Agreement has been or may now or may later be
required as a condition precedent to the expenditure of Federal funds for the
development of the Airport. LESSEE agrees that to the extent which any such
Federal Agreement may affect LESSEE and its use of the Leased Premises and
Airport, LESSEE will act in compliance therewith. If however, in consequence of
such subordination to the Federal Agreement, LESSEE is required to give up
any part or all of the Leased Premises or to alter, remove, or relocate all or any
part of its improvements, the rent payable under this Lease will be
proportionately reduced, but LESSEE will, at its sole cost and expense, make
such alterations, removals, or changes as may be required. However, if due to
the Federal Agreement, the Leased Premises becomes substantially unsuitable
for the use described Section 4, LESSEE may, at its option, terminate this Lease
upon 30 days prior written notice to CITY.
43. RIGHT OF FLIGHT
CITY reserves to itself, its successors and assigns, for the use and benefit of
CITY and the public, a right of flight for the passage of aircraft in the airspace
above the surface of the Leased Premises, together with the right to cause in
such airspace such noise as may be inherent in the operation of aircraft now
known or hereafter used for navigation of or flight in the air using said airspace or
landing at taking off from or operation on the Airport.
44. HAZARDOUS MATERIALS
A. Contamination Subsequent to the Effective Date
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As used herein the term "Hazardous Material" means any hazardous or toxic
substance, material or waste which is or shall become regulated by any
governmental entity, including without limitation, CITY acting in its
governmental capacity, the State of California or the United States
Government.
LESSEE shall not cause or permit any "Hazardous Materials," hereinafter
defined, to be brought upon, kept or used in or about the Leased Premises in
violation of law. If LESSEE breaches the obligations stated herein, or if
contamination of the Leased Premises by Hazardous Materials otherwise
occurs for which LESSEE is legally liable to CITY for damage resulting
therefrom, then LESSEE shall indemnify, defend and hold CITY harmless
from any and all claims, judgments, damages, penalties, fines, costs,
liabilities or losses (including without limitation, diminution in value of the
Leased Premises, damages for the loss or restriction on use of rentable or
usable space or any amenity of the Leased Premises, damages arising from
any adverse impact on marketing of space in the Leased Premises or portion
of any building of which the Leased Premises is a part, and sums paid in
settlement of claims, attorneys fees, consultant fees and expert witness fees)
which arise during or after the lease term as a result of such contamination, if
any.
This indemnification includes without limitation, costs incurred by CITY in
connection with any investigation of site conditions or any cleanup, remedial,
removal or restoration work required by any federal, state, local or legal
governmental entity because of Hazardous Material being present in the soil
or ground water or under the Leased Premises due to Hazardous Materials
brought upon, kept or used in or about the Leased Premises in violation of
law. LESSEE shall promptly take all actions at its sole cost and expense as
are necessary to clean, remove and restore the Leased Premises to its
condition prior to the introduction of such Hazardous Material by LESSEE,
provided LESSEE shall first have obtained CITY's reasonable approval and
the approval of any necessary governmental entities.
B. Pre-Existinq Contamination
LESSEE shall not be held liable, nor shall LESSEE be required to indemnify
CITY for any loss or damage sustained as a result of pre-existing Hazardous
Material located on or near the Leased Premises. Therefore, CITY hereby
agrees to indemnify, defend and hold LESSEE harmless from any and all
claims, judgments, damages, penalties, fines, costs, liabilities or losses,
known or unknown, arising from any pre-existing soil contamination or other
preexistence of any Hazardous Material on or under the Leased Premises
prior to the Term Commencement Date, or otherwise caused by CITY,
including but not limited to any sums paid in settlement of claims, attorneys
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fees, consultant fees and expert witness fees which arise during or after the
lease term and as a result of such pre-existing contamination, if any.
45. PUBLIC RECORDS
Any and all written information submitted to and/or obtained by CITY from
LESSEE or any other person or entity having to do with or related to this Lease
and/or the Leased Premises, either pursuant to this Lease or otherwise, at the
option of CITY, may be treated as a public record which will made open to the
public for inspection or copying pursuant to the California Public Records Act
(Government Code Section 6250, etc.) as now in force or hereafter amended, or
any Act in substitution thereof. LESSEE hereby waives, for itself, its agents,
employees, subtenants and any person claiming by, through or under LESSEE,
any right or claim that such information is not a public record or that the same is
a trade secret, or confidential, or not subject to inspection by the public, including
without limitation reasonable attorneys' fees and costs.
46. RELATIONSHIP OF PARTIES
The relationship of the parties hereto is that of lessor and lessee, and it is
expressly understood and agreed that CITY is not, and shall not in any way or for
any purpose become a partner of LESSEE in the conduct of LESSEE's
business. This Lease and any related documents shall under no circumstances
constitute a joint venture or partnership between CITY and LESSEE. The
provisions of this Lease and the agreements relating to rent payable hereunder
are included solely for the purpose of providing a method by which rental
payments are to be measured and ascertained.
47. ATTACHMENTS TO LEASE
1. ATTACHMENT "A" - RFP
2. ATTACHMENT "B" - PROPOSAL
3. ATTACHMENT "C" - LOCATION PLAN
4. ATTACHMENT "D" - REQUIRED IMPROVEMENTS
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WEREOF, the parties have executed this Lease the day and year
first written above.
ATTEST:
~/
Beverley White, City Clerk
r~~~~
Richard D. Jones, City Attorney
Lease for Operation
of Restaurant At Fullerton Airport
LESSEE
By:;rOL /-&
Steven Awh .... l.ea..:'v) v.Jov\
CITY OF FULLERTON
By:~~~J
Don Bankhead, Mayor
~~R~
Donald K. Hoppe
Director of Engineering
Q~~
Rod Propst, AAE
Airport Manager
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25
ATTACHMENT "A"
REQUEST FOR PROPOSAL
CITY OF FULLERTON
REQUEST FOR PROPOSAL
FOR THE
MANAGEMENT AND OPERATION OF THE RESTAURANT
AT THE FULLERTON MUNICIPAL AIRPORT
City of Fullerton
Engineering Department / Airport
4011 West Commonwealth Avenue
Fullerton, CA 92833
714-738-6323
REQUEST FOR PROPOSAL
FOR THE
MANAGEMENT AND OPERATION OF THE RESTAURANT
AT THE FULLERTON MUNICIPAL AIRPORT
The restaurant at the Fullerton Municipal Airport is located in the Terminal Building at
4011 West Commonwealth Avenue, Fullerton, California, and consists of approximately
2,414 square feet, including the dining area, kitchen, and walk-in refrigerator.
The party selected as the "best responsible party" and ultimately approved to be the
lessee by the Fullerton City Council will be allowed to serve beer and wine after
obtaining all necessary permits and approvals from the appropriate governing
authorities. No other alcohol shall be served or consumed at the premises.
The minimum monthly lease payment for the restaurant included in this RFP is $1,085
(approx. 0.45/s.f.), which will be increased annually based on the Consumer Price Index
for the Riverside-Orange County area, within a range of 3% to 5%. Additionally, a
monthly fee of 3% for gross sales over $30,000 in a month shall be paid to the City in
addition to the monthly lease payment. The required parking for this restaurant is
provided at no cost to the lessee; it is non-exclusive and is located immediately in front
of the tower building as well as to the east and west. The term of the initial lease is for a
period of five (5) years with two (2) additional five (5)-year options.
Included in this Request for Proposal is the requirement to upgrade / install trade
fixtures and cosmetic repair of restaurant. In order to accomplish these upgrades,
fixture installations, and cosmetic repairs, a grace period not to exceed ninety (90) days
or when a Certificate of Occupancy is granted, which ever occurs first will apply. This
ninety (90)-day grace period begins on the first day of the next month after the lease is
executed and during this period, no lease payment will be due or collected unless a
Certificate of Occupancy is granted prior to the end of the ninety (90)-day period, at
which point, lease payment will be due on the first day of the month as included above.
Any additional information concerning submittal of proposals may be obtained by
contacting:
Rod Propst, Airport Manager
Fullerton Municipal Airport
City of Fullerton
4011 West Commonwealth Avenue
Fullerton, CA 92833
714-738-6323
The party selected by the City of Fullerton as the "best responsible party" will be
expected to provide a professional assessment of all impacts of its proposal and how to
mitigate any impacts considered by the City of Fullerton, in its sole discretion, to require
mitigation.
GENERAL REQUIREMENTS
The general requirements and procedures are as follows:
Where:
Sealed proposals will be received at the City of Fullerton, City Clerk's
Office, 303 West Commonwealth Avenue, Fullerton, California 92831.
When:
Proposals shall be received not later than 5:00 p.m., Friday, November 6,
2009.
How:
Proposal must be in a sealed envelope identified on the outside as a "City
of Fullerton Airport Restaurant Proposal".
SPECIAL REQUIREMENTS
Any proposal submitted must include the following:
. A plan detailing the dimensioned layout of the proposed restaurant upgrade /
installation of trade fixtures and cosmetic improvements.
. A detailed financing plan, including the sources and uses of funds, a business
plan for the operation of the restaurant, and minimum cash flow requirements
that would allow for the successful completion of the proposed improvements
without cost to the City of Fullerton.
. A time-line detailing construction activities relative to the approval of an
agreement by the Fullerton City Council.
SELECTION OF A SUCCESSFUL PROPOSAL
A suitable agreement to complete needed improvements to the restaurant and to
operate the restaurant will be executed with the "best responsible party". The "best
responsible party" will be that party the City of Fullerton City Council may determine, in
the exercise of its discretion, to be the best to implement the plan proposed. Selection
of the "best responsible party" will be based on a number of factors, including but not
limited to:
. The proponent's conceptual plan for necessary upgrade / installation of trade
fixtures and the cosmetic repair of restaurant.
. The soundness of the financing plan, including total costs and financing.
. The business background, experience, and reputation of the proponent, including
the proponent's prior experience in the operation of restaurants.
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The determination of the "best responsible party" will not be based on anyone factor.
The City of Fullerton may, at its sole discretion, use any or all of the above criteria in its
selection of a proponent and may weigh each factor in its sole discretion. The City of
Fullerton reserves the right to reject any and all proposals.
The City of Fullerton will cooperate in any requests for permissions or approvals
required, but all permissions and approvals are the responsibility of the proponent. All
local, state, and federal permits and/or approvals required shall be the responsibility of
the project proponent.
A site inspection by the proponents will be necessary to determine the extent and
nature of necessary work to upgrade / install trade fixtures and complete the cosmetic
repair of restaurant.
The submittal of a proposal shall constitute an acknowledgement on the part of the
proponent that they are fully aware of their responsibilities in making the proposal. Final
terms and conditions for the construction and financing will be negotiated by the
proponent and City representatives, for the City of Fullerton City Council approval.
Notwithstanding any understandings or representations to the contrary, no agreement
will be considered as final and binding on the City of Fullerton until documents have
been approved by the City of Fullerton City Council and subsequently properly
executed.
4
EXHIBIT A
Qualifying Information
All information described below must be submitted with the proposal. Statements must
be complete and accurate-omission, inaccuracy, or misstatement may result in
rejection of a Proposal.
Entity:
The name and address of the legal entity that will execute any documents,
exactly as it should appear on these documents.
If the entity is a partnership, include the type of partnership, the name, address,
and share of each general partner.
If the entity is a corporation, describe when it was incorporated and the state of
incorporation.
Experience:
Describe in detail your business experience with special emphasis on any
qualifications or experiences you may have which would be beneficial to you for
the operation and management of a restaurant.
References:
List three references with which you have conducted business transactions
during the past two years, similar in nature to the proposal being submitted.
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ADDITIONAL INFORMATION
Any proposal may be withdrawn at any time prior to the time fixed for the opening of
proposals in the RFP, by filing out a request, executed in writing by the proponent or
his/her duly authorized representative, with the City of Fullerton.
The City of Fullerton reserves the right to request supplemental information from any
proponent any time between the dates of the opening of proposals and any proposal
approval. In its review of proposals, the City of Fullerton reserves the right to meet with
proponents to review, discuss, analyze, and clarify their proposals.
The proposals will be opened, reviewed, and evaluated by City of Fullerton staff.
The City of Fullerton City Council, at its discretion, may execute an agreement with any
of the proponents whom the Council determines to be the best responsible proponent.
Necessary upgrade / installation of trade fixtures and completion of the cosmetic repair
of restaurant must be complete within 90 days after agreement execution, but under no
circumstances prior to the execution of an agreement by the City of Fullerton.
Any agreement involving construction on airport property will require furnishing a bond
for the cost of construction and liability insurance, acceptable to the City of Fullerton
Risk manager, naming the City of Fullerton as an additional insured.
The City of Fullerton reserves the right to amend this RFP as the City deems to be in
the public interest prior to the opening of proposals. Notice of such amendments shall
be given to each prospective proponent who previously furnished their name and
address (or that of their authorized representative) to the City of Fullerton by either
mailing a copy of such notice not later than the seventh (ih) calendar day prior to the
date set for the proposal opening or personal delivery of a copy of such notice not later
than twenty-four (24) hours prior to the date and time set for the proposal opening. Any
such change shall also be announced immediately prior to the proposal closing,
November 6, 2009, at 5:00 p.m., and this shall be the only notice to be given to any
proponent who may have failed to furnish their name and address to the City of
Fullerton as required above.
The City of Fullerton will not pay a commission to any real estate broker or agent in
connection with this agreement.
6
FULLERTON MUNICIPAL AIRPORT
4011 West Commonwealth Avenue, Fullerton, California 92833-2537
Telephone' 714.738.6323
Fax' 714.738.3112
Website * www.ci fullerton ca us
October 26, 2009
Ref: Request for Proposal
Fullerton Municipal Airport Restaurant
TO ALL INTERESTED PERSONS:
This is to notify all holders of Request for Proposal for the
Management and Operation of the Restaurant
at the Fullerton Municipal Airport
that inadvertently the RFP indicates the submittal of seal Proposals is Friday, November
6, when in fact the actual submittal date is 5:00 P.M. FRIDAY, NOVEMBER 20,2009,
as advertised in the Invitation to Submit a Proposal.
Sincerely,
Rod Propst, ME
Airport Manager
RP/srn
ATTACHMENT "B"
PROPOSAL
CITY OF FULLERTON AIRPORT
RESTAURANT PROPOSAL:
FLYER'S DINER
Dear Mr. Propst:
I am submitting the following proposal for your consideration.
For couple of years I had been looking around Fullerton area to open a restaurant. Mike Oates had
informed me that an opportunity may open up at the Fullerton airport about a year back. Since then, I
had been checking the city's web site every month and then I got really busy with work and travel in the
last two month. low and behold Mike gives me a call right before I was to go to Eastern Europe about
the RFP. What I'm trying to say is that I had about a week and a half to consider the whole situation and
put together a proposal.
Instead of wasting time, paper, and ink to fill in a generic standard business plan that impresses the
uninformed, I hope that I have put together enough information together to give you a solid Ideal about
myself and my plans.
I am very excited about this unique opportunity to be partnering with the city to provide great service to
this very important venue.
Thank you for your consideration of my request.
Sincerely,
Steve Awh
I. Ownership
The Flyer's Diner will be a parrnership owned by Sreve Awh and Leah Won. Sreve Awh will also
manage rhe c'& and will be s responsible for operation and employee managemenr. My wife Leah
will be responsible for finances and marketing marerials.
II. Mission Sraremenr
To offer good wholesome qualiry foods In a dean family orienred atmosphere. To add value and
experience ro an already Imporrant dry venue. To become poslrive, proactive member of rhe dry of
FuIlerron. Have fun.
III. Description of Business I current operation analysis
There are many good dungs abour rhe currenr operation, like long rerm rerenrion of wairresses and
configuration of dle searing area for versatiliry and views. There are many rhings rhar need
improvemenr as well. I am not rrying to second guess rhe currenr managemenr; rarher, I am trying
ro poinr our whar I would do ro increase qualiry of producr and services.
· The Flyer's Diner will be designed ro creare a sense communiry wirh friendly
neighborhood feel. A prioriry will be placed on wholesome foods made from scrarch.
· Expanded menu irems wlrh emphasis on adding value ro offering by berrer plating and
higher qualiry of foods. Offer more choices wirh comblnarlons. Simply put, prices will
not be lowered but more will be given In terms of qualiry. Some price leading specials
will be offered for marketing purposes. For example, we will make our own sansages and
biscnits from scratch.
· Lnndl menu will be expanded beyond jnst burgers. Salads, meadoaf, pastas, and
appetizers will be offered.
· Flyer's Diner will become part of rhe comllluniry by offering irself and rhe ownership ro
various dlarities and events for good causes to be a positive member of rhe dry.
· Retain dIe current staff to give rransitional stabiliry and conslstenr services.
· The owner will shop for fresh produce and products to ensure llighesr qualiry for dIe
money.
· All deferred malnrenance will be addressed.
. The look and feel of me restauranr will be updared.
· Branding will be emphasized wlclt printed shirts, signage and hats.
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· Creative marketing will be applied to drive customers.
· Improve the outside look and feel of the restaurant.
. Expanded hours may be offered to drive sales and service.
IV. Marketing Strategies
Word of mouth from satislled customer is the best form of advertizing. however, during these hard
economic conditions; we need to be very proactive in consistently implementing cost efficient
marketing plan.
Traditional mediums like flyers, maUers and door hangers will be implemented.
Internet website will be created and social network site and linkage will be explored to drive intetest.
Proactive participation in the community activities, charities and organization to help and obtain
exposure. Win win situation for all
V. Experiences
I'm currently operating a take-out and delivery pizzeria in Los Angeles. \Ve have been there for nine
years. Following are the list ofbnsinesses that I've owned and operated as a sole proprietor or in
partnership:
Ace Burgers (fast food)
Kay's Donuts-later converted to Breakfast and Burgers (breakfast and lunch diner)
Nico's pizza (casual Italian offering pizza. pasta, salads, and sandwiches)
What's Brewing (gourmet coffee shop)
DK Karaoke (Korean cafe)
Pizza Go (take-out and delivery pizza)
3
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VI. Dimensional layout of the dining area:
The best point abour the restaurant is the view of the air porr runway and the parked planes our on the
tatmac.
Any and all dlOnges to the dining room layout should take advantage of tI,is unique fearure of the
restauranr.
Typically, a considetarlon should be made to accommodate single customers WitI, a counter top seating,
however, the most sensible placement of the counter top would mean thar the customers will not have
a view to tIle tarmac.
Review of the current seating arrangement shows that the previous vendor considered this unique
feature and arranged the seats and tables to take advantage of the views.
In light of these mCtOrS, the seating arrangement should be leEr alone unless rearrangement would allow
superiot view for customers. Change for change sakes would seem to be a wasre of time and resources.
VII. Upgrade/installation of trade 6xrures:
All current trade fixture not attached to the property is owned by the vendor.
Good will offer will be extended to current vendor to retain equipment and fixture in good working
condition. Specifically, interested in retaining d,e grill (2Oyrs of seasoniug). Othenvise, all equipment
necessary to provide safe and quality foods will be brought in.
AddItional equipment to offer more variery of foods will be brought in, sud, as a baker's oven (e.g. fresh
biscuits and German pancakes).
4
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VIII. Cosmetic improvements:
Exterior:
The restaurant does nor look like a restauram from the outside. I would like to create a look and feel of
a restaurant from the outside. Can we put in a bigger sign, neon trim, led color lights, murals, differem
wall colors, flags, and banners?
Interior:
The space should be bright, clean and inviting. An interior design should reflect the type of foods
offered by the restaurant. The wall colors and the floor should be light to extend the height of the low
ceiling. Bold color seats and tasteful understated aviation themed pictures and accents will decorate
the space.
New wall colors, new table tOps, new floor. new acoustical ceiling panels ,new chairs and reupholster the
vinyl booths.
Professional designer will be Angela Lee (designer for Agora Brazilian steak house ofIrvine).
5
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IX. Construction time line:
All out effote will be made to minimize down time.
Many aspects of the renovation can be done simultaneously. After flnal design and approval,
approximate time line for consuuction should be about three to four weeks since there will be no
anticipated StfUcmral work.
1. Outside signage, painting ( 2 weeks)
2. Interior wall and partition prepping, acoustical ceiling removal and floor ptepping (3 days)
3. Interiot wall painting (priming, painting, accents) (3-4 days)
4. Flooring (wood or tiling) (3-4 days)
5. Table tops order, delivery and install (2 weeks)
6. Chairs ordered and delivery (2 weeks)
7. Booth sent Out to be reupholstered (2- 3 weeks)
8. New light flxmres ordered and installed (2-3 weeks)
9. Acoustical ceiling install (1 day)
10. Picmres and theme accents purchase and install (2 weeks)
Numbers 2,3.4 cannot be done simultaneously therefore it would require two weeks tOtal
Numbers 5,6,7,8, and 9 requires time to delivet, however, install time for ailS through 9 should take no
more than 3 days total.
Realistic time frame for completion will be three to four weeks for the completion of the project.
6
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X. Financial Information
1'm looking to divest in my ownership of die pizzeria in Los Angeles if the restaurant is offered to
me.
Sources and Uses ofFlluds-
Sources
Owner's I nvestmellt $50.000
Loan 0
Total Sources $50,000
Uses
Purchase of Equipment $7.000 -$15.000
Renovations to leasehold 5,000
Rent deposit 0
Furniture 7,000
Dishes/ glassware/silverware 2,000
Cookware 500
Supplies 100
Misc. 500
Food Inventory 3.000
Advertising 1,000
Signage 1,000-3,000
Menu, shirts, mkt.literature, web site 2,500
Working Capiral 10.400-19,400
Total Uses $50,000
7
Business operarion and cash flow
This is rhe numbers I've obtained about the current business which is a very good indicator. Orher
information is derived through observation and experience.
Gross sales 24,000
Rem 900
Food cost 6,000 (Approy. 25%, derived from menu pricing. portion and quality)
Salestax 2,100
Labor
9,600 (approx. derived from hour of operation, number of employees and peek
operating times)
Utilities I, 1 00 (Los Angeles ptices for gas, e1ectriciry, water and phone)
Ins 150
Acctng. -100
Totexp. 19,950
Pre tax Income 24,000-19,950= 4,050.00
lEI was to take over today rhis trend should hold but we would incur higher and additional costs:
Food cost 1,200 more (Add value by higher quality foods would raise food cost from 25% to 30%)
Rent 145 more. (Contractual increase)
Adv. 2.000
3,3045
Pre tax income 4,050-3,345 = 705
The break even figure is approximately $800 datil' average.
8
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We are experiencing an extraordinary market conditions that has devasrated
restaurant operators. Even with current conditions the restaurant is generating
enough business for a positive cash flow. An experienced, energetic and creative
operator with an adverrising campaign, new interior, expanded menu, value added
quality foods, and community presence, will enable Flyer's to reach profitability in
about 2-3 month and double digit percentage increases by the end of the year.
Thank you once again for the opportunity.
SteveAwh (714) 318-8549
9
ATTACHMENT "C"
LOCATION PLAN
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ATTACHMENT "0"
REQUIRED IMPROVEMENTS
REQUIRED UPGRADES: Kirchen. Dining area. and our side (signs. outside walls. and wall in me lobby)
I. Kitchen: Following are me changes. upgrades and repairs of me Kirchen area.
a. Purchase and insrall new coffee equipment
b. Purchase and install new flIrration sysrem for the coffee equipment
c. Repair walk in refrigerator.
d. Repair two door refrigeratot.
e. Repair under counter refridgeratot.
f. Fix alllealcs.
g. Purchase and install two-burners
h. Purchase and install microwave oven.
i. Purchase and install convecrion oven.
j. Purchase and install waIDe equipment.
k. Purchase flatware, cook-ware, and omer necessary equipment.
L Ergonomic changes to me cooking and prep area (non structural).
Most of me irems listed above has already been completed or will be finished within firsr week of March.
However, continual updaring and purchasing of equipment will be ongoing to suppon me development of me
restaurant.
II. Dining area: Following are the changes to me dining area.
a. Re-upholsrer booth searing.
b. Paint or new wall paper.
c. Install themed motive.
d. Repair or replace chairs.
e. Install and paint new ceiling tiles.
f. Repair install 'step".
g. Clean or install new carper.
All options were carefully considered and studied. from total renovation to partial up-grade. Factors such as
the decor of the surroundings including the lobby, restrooms, the outside area, eutrent cusromer base, wait staff,
down time and cost. All these bctor combined provides a unique nostalgic envitonment. Above listed items
will allow a long waited update and cleanliness to the restaurant. Changes will be implemented in conjunction
with the cities repair of the leaks and up-dates to the windows. Finish date is targeted two weeks afrer city's
completion of repairs.
Ill. Out-side: Signage, walls, murals, lobby.
Signs will be changed near the end ofFebruaty or early March along with introduction of new menu.
Changes to the walls outside and in the lobby will be consulted with the city for approval.
Changes will take longer than normal time because the work has to be completed during off hours to minimize
business interruption.
Upgrades and changes will be continually made to ptovide good dining experience and the Fullerton airport.